In 1993 when SPDR S&P 500 or the SPY as it became known, was introduced I paper traded it for a year and compared results against a number of other products I had tried for hedging my portfolio against losses in market downturns. The SPY PUT returns were remarkable and since then I have had a love affair with the SPY PUT. It is the main and usually only method I use to hedge my entire portfolio of stocks. I have tried a number of other methods including the popular power shares QQQQ / Read More

Often the reasons for using the SPY PUT hedge are pretty simple. Whenever I see a market top or a market direction down confirmation I know it is time to step away from my usual stock put selling selection criteria for a moment and pick up some spy put contracts. Yesterday I purchased 20 SPY PUT April 21 2012 $135 contracts for $4.35. My market timing indicators have for a few days now been sending warnings that the market direction is about to change. On Feb 9 though, the market timing indicator I / Read More

SPY PUT hedge returned to action this morning with the selloff sparked by Intel’s earnings warning. What a difference a weekend can make. As indicated in my market timing / market direction comment on Friday, while it was a nice rally, none of the market timing indicators supported the move higher. Indeed my favorite tool, the Ultimate Oscillator refused to confirm the trend had changed on Friday. Indeed it still pointed to market down. This morning, looking at my market indicators, they all confirmed that we have lower to go. With that in / Read More

SPY PUT Double dip days are uncommon events. They occur in bear markets, not bull. The bear market that has been with us since May 2011 is now into its 7th month. Thanks to the bear market, my SPY PUT hedge has added significantly to my profit. Almost 50% of the profit earned in my US Portfolio is from my SPY PUT trades. As explained on the weekend, I purchased spy puts on Friday just before 2:00 PM to hold over the weekend for protection. This morning shortly after the open I sold / Read More

SPY PUT returned to my trading today with what ended up as a simple trade. When I indicated yesterday morning in my Market Timing / Market Direction call for Nov 8 that I thought the market could roll over, I didn’t assume it would do it in one day. But the collapse today was excellent for my SPY PUT trade and it was almost picture perfect using the ultimate oscillator yet again. SPY PUT – GAP DOWN OPEN IS THE SIGN When I see a great big gap down open I immediately set / Read More